Interests

got something to say?

Chinalco's Liancheng aluminium smelter to get power deal

Jul 26th 2015 at 9:32 AM

KUNMING, China, Nov 27 - Lanzhou Liancheng Aluminium, controlled by Aluminum Corporation of China , is about to get a deal to buy electricity directly from a power producer, a planning director at the Ministry of Industry and Information Technology said on Friday.If approved by the National Development and Reform Commission, Liancheng will be the second aluminium smelter under a central government scheme to allow 15 aluminium smelters to buy power directly from plants.The scheme, monitored by MIIT and launched in the first half of this year, is expected to cut aluminium smelters' power costs. But so far the NDRC has only approved Fushun Aluminium. [ID:nPEK146475]Fushun is controlled by Chinalco's listed arm Chalco <2600.HK> <601600.SS>.He Xiaowen told Reuters on the sidelines of an aluminium conference in Kunming in Yunnan province that the power fee to Fushun was expected to fall below 0.40 yuan per KWh and the Fushun case was giving a model to other smelters.Aluminium smelters in China use about 14,000 KWh for the production of one tonne of primary aluminium and the power fees take up around 42 percent of smelters' production costs.The scheme needed to clarify the relations among grids, power producers and smelters, He said.He did not provide an estimate of how long it would take to bring all smelters' power fees under the scheme.Wen Xianjun, vice chairman of the China Nonferrous Metals Industry Association, told the same conference that high energy costs were limiting profits at smelters despite strong aluminium prices, which had risen by a third so far this year.